Revocation of an Offer under the CISG in a Comparative Law Perspective

Under the CISG a withdrawal may only take place before the offer reaches the offeree whereas the revocation may be triggered after the offer reaches the offeree but before the latter has dispatch an acceptance.

The United
Nations Convention on Contracts for the International Sale of Goods (“CISG”) makes
a distinction between a withdrawal and a revocation. According to the said
distinction, a withdrawal may only take place before the offer reaches the
offeree whereas the revocation may be triggered after the offer reaches the
offeree but before the latter has dispatch an acceptance. In this respect, it
could be concluded that a withdrawal prevents an offer from becoming effective;
while the revocation terminates an effective offer; both ultimately call off an
offer’s capability of being accepted.

The issue of
revocation is undoubtedly one of the subjects that the Drafters of the CISG
tried to find a middle ground between common and civil law approach. In fact,
under the common law, there is not a distinction between the terms “revocation”
and “withdrawal”. According to common law point of view, an offer can be
revoked at any time prior to an effective acceptance.[1] So much that, even if the offeror specifically
provides a particular time frame until which the offer shall be held valid;
such offer, nevertheless, cannot be deemed as “irrevocable”. Therefore, the
offeror would still be able to change its mind and revoke such offer at its
convenience, subject to some exceptions which are generally found across common
law jurisdictions; such as offers under seal and “option contracts”[2]. Together with this, an offeree who wishes to have
the offeror be bound by its offer until the time when the former either rejects
or accepts the offer, has to give what is called as a “consideration” to the
latter. A consideration is “a device
which is required in common law jurisdictions to make an offer binding”[3].

Civil law
jurisdictions, conversely and clearly embrace a different track with regards to
the issue of revocation of an offer. Firstly and very distinguishably, the
concept of “consideration” does not exist in the civil law tradition. For
example, under Turkish Law[4], as a civil law jurisdiction, it is established that
an offeror shall continue to be bound by its offer until the fixed time set for
a prospect acceptance elapses or in the absence of such fixed time, until a
reasonable length of time passes after the offer was made. As for the offers
conveyed in the presence of the offeree, the offeror is freed from being bound
by its offer unless the offeree immediately accepts such offer. This position
holds almost exactly the same for many other civil law jurisdictions as well.[5]

French Supreme
Court, despite its constant reaffirmations that an offer, as a general
principle, is revocable before it is accepted, however almost extinguishes that
possibility by imposing restrictions that may potentially apply for every case
which is that an offer may not be revoked where it states a certain time for
acceptance or, in the absence of such fixed period, for a reasonable period of
time[6], which essentially boils down to the same rule set
under the Turkish Code of Obligations. As seen, under the common law approach,
the default rule is the offer’s “revocability”, whereas under most of the civil
law jurisdictions[7], it is the other way around; an offer is deemed
irrevocable once it reaches the offeree, at least, up to a certain point in
time unless the offeror made clear that its offer is non-binding.[8] It is quite interesting to see that the rivalry
between common and civil law approach towards the issue of revocability was
such a hot topic during the drafting stage that, in the end, the Scandinavian
States, who consider the final version of the provision “unduly influenced by the corresponding Common law rules” made a
reservation under Article 92 in order to opt-out from Part II of the Convention
grounding their decision on, inter alia,
the aforementioned reason.[9]

Under the CISG,
it is adopted that, in principle, an offer is revocable; which makes it seem as
if the Convention has embraced a closer approach towards the common law method.
That being said, the respective provision further expands the said rule by
introducing certain restrictions where an offer is deemed as irrevocable which
manifestly portrays the civil law influence. Some commentators have expressed
that the fact that the rule on revocation encompasses characteristics from both
common and civil law traditions should not be considered as being a compromise
between these legal systems, but rather “one
that brings to light the common basis of the two”. [10]

[5] “…rules of the Germanic legal systems: they
are the ones most at odds with the English rules in that they embrace the
principle that the promise as such is binding, even if the beneficiary of the
promise has not manifested his intention to accept it. Take § 145 of the German
BGB, § 862 of the Austrian AllgemeniesBürgerlichesGesetzbuch, or Articles 3
para. 1 and 5 para.1 of the Swill Code of Obligations. In all of them, you find
the rule that, once an offer has been made, the offeror remains bound by the
offer until the period fixed in the offer has elapsed or, if no such period was
fixed, until a period of reasonable length has expired. If the offer is
accepted while the period is still sunning, the contract is concluded without
leaving the offeror the chance to reject the contract, except where he has made
it clear that his offer would not be binding...” Excerpt from:

[7] “In civil law systems, while an offer can be revoked
(as it can at common law) the revocation might be more costly. In French law,
for example, ‘although revocation of an offer is permitted… the offeror is
bound to indemnify the offeree or to pay damages in case of revocation’. In
German law and in other civil law systems, ‘an offer is binding unless the
offeror stated that the offer was revocable.’ In Italy, an offer can be revoked
even after acceptance by offeree if revocation occurs before offeror knows of
the acceptance. However, if the revocation occurs after the offeree has
accepted and in good faith starts performing the contract, the offeree is entitled
to damages for the expenses incurred and for any losses incurred.”
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